Land Tenure and Land
Management Alternatives
By Shane Broad, Amabel Fulton, Tasmanian
Institute of Agricultural Research, University of Tasmania
Publication No. 03/027 Project No.
UT-32A
Executive Summary
There are a number of ways
a landowner who does not want to sell can keep their land and continue
to make an income at relatively low risk. Generally, these options involve
some form of land tenure agreement. Although renting land may attract the
landowner looking for a change, similar opportunities are available to
those looking to enter agriculture without buying land or to landowners
wanting to expand operations without making further land purchases. Between
them, the owner (lessor) and the tenant (lessee) create a land rental market
that is defined by supply and demand.
The separation of land ownership
from farm business ownership is most commonly seen in leasing and share-farming
agreements where there is a landowner and a lessee or sharefarmer. Many
such agreements are wellestablished in Australian agriculture. Increasingly,
agricultural businesses are developing joint ventures and incorporating
as companies to improve efficiency, pool expertise and finances, and ultimately
increase profits.
This publication focuses
on some of the legal entities that are used in farm business arrangements.
It provides an insight into the most appropriate arrangement for different
situations.
The research shows
that:
-
Farm business arrangements are
suited to people entering farming without their own land.
-
Farm business arrangements can
allow farmers to expand their operations without tying up financial resources
in land purchases.
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An agreement should be appropriate
to the both parties’ situations and goals: different agreements bring different
levels of risk and require varying levels of input.
-
Any arrangement entered into
must be equitable for both parties.
Otherwise, it may result
in resentment and under-performance; the agreement may end prematurely
or unsustainable practices may develop.
Last updated: 12 May
2004
Copyright RIRDC
http://www.rirdc.gov.au/reports/Ras/03-027sum.html
